Rental demand set to remain high despite interest rate cuts

20 2008
Large numbers of Britons are set to stay in the rental accommodation sector as lenders have failed to pass on the rate cuts needed for them to purchase their own home.

While the Bank of England has cut interest rates by half a per cent over the past couple of months, this has yet to be reflected across the range of mortgage products available.

This is likely to mean that demand for rental accommodation remains high, with prospective first-time buyers set to wait a while more before making the switch to buying a property.

According to the latest data from Moneyextra.com, people now need a mortgage of £135,051 to get onto the property ladder, a figure too high for the majority.

"December's cut in base rate has yet to be reflected in the housing market with many lenders dragging their feet in reducing their mortgage rates before Christmas," explained the site's senior editor, Robin Amlot.

"Will February's further rate cut have any real impact on the weakening housing market? It seems unlikely."
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